WCAB Imposes Sanctions on Carrier, Adjuster and Defense Attorney

"the WCAB's decision was consistent with the statutes, which provide that a party generally can only be deposed once. "You can't expect to have continuing depositions once the record is closed," he said, and "you can't do it just because you want to." Michael Win

The California Workers' Compensation Appeals Board ordered $16,510 in sanctions against TIG Specialty Insurance, its claims administrator and its defense attorney for engaging in bad-faith and frivolous actions in a benefits dispute.

The panel concluded that the monetary penalty against the carrier, Risk Enterprise Management and counsel Ekatherina "Kate" Zarutsky of Shaw, Jacobsmeyer, Crain & Claffey, was warranted based on their attempts to compel applicant Lisa Weilmann to submit to a deposition.

In 2002, Weilmann and TIG stipulated to a cumulative trauma injury for various body parts, resulting in a 55% permanent disability, for which the carrier would provide future medical treatment.

TIG took her deposition in April 2006 after Weilmann was involved in a car accident.

Weilmann testified that she treated with Drs. Eric Snowden and Steve Goldman after the accident. When asked for Dr. Goldman's contact information, she said he had just relocated to a location on "Barrington," and she provided his phone number. A blank space was left in the deposition transcript for Weilmann to fill in Dr. Goldman's address later.

Weilmann also indicated that she had medical coverage at the time of the accident, and another blank space was left in the transcript for Weilmann to add information about her coverage at a future point.

At the end of the deposition, the defense attorney said he had no more questions, and the parties agreed that any amendments providing information to the deposition would be made within 45 days.

Four years later, TIG sought to depose Weilmann again. Weilmann's attorney, the late Kenneth H. Rowen, objected. She requested a protective order and sanctions and attorney fees of $1,200 under Labor Code Section 5813 and Code of Civil Procedure 2023 for misuse of the discovery process.

TIG then filed a petition to compel the deposition, alleging Weilmann had a "recent increase in her medication usage and the use of her medical treatment award."

The carrier argued that it needed to question Weilmann about her present medical condition and any interim injuries that led to the increase in her medical costs, on the basis that it might be able to receive contribution from other insurance carriers.

TIG later filed a verified objection to Weilmann's request for a protective order and sanctions. In this sworn statement, TIG said that during the April 2006 deposition, Weilmann had testified that she received treatment from a doctor whose name she could not recall and "(t)here was a blank left in the deposition transcript for the name of the doctor."

In addition, TIG said that Weilmann had not provided the names of all of her treating doctors after the car accident, and that a blank had been left in the transcript for Weilmann's medical coverage carrier at the time of the accident.

Workers' Compensation Administrative Law Judge Craig Glass ruled that TIG was not entitled to depose Weilmann, noting that only one deposition was permitted under Code of Civil Procedure Section 2025 (now renumbered as 2025.610). He also suggested that TIG could use other methods of discovery to obtain the information it said it needed, such as subpoenas and medical reports.

Weilmann then requested sanctions and attorney fees again.

Last December, Glass ordered TIG and Risk Enterprise Management to pay Weilmann's attorney costs of $15,610 and a penalty of $2,500 – the statutory maximum allowable under Labor Code Section 5813 – to the state General Fund.

The defendants sought reconsideration, which the board granted in February. It directed the parties to file responses to its notice of intention to impose sanctions within 15 days directly with the WCAB office in San Francisco.

In the notice, written by Commissioner Alfonso Moresi, the reviewing panel said that the arguments raised by the defendants were "entirely without merit," and contained numerous misrepresentations, made under oath.

Moresi said Zarutsky should also be held liable for sanctions, citing her obligations as an attorney to respect the courts and judicial officers and be truthful at all times.

Neither party responded to the board, although the defendants filed an objection at the Marina del Rey district office on March 20.

Moresi, writing for the panel again on April 9, said that since the defendants failed to comply with the order to file their response directly with the board, the panel had discretion to disregard their argument, and admonished the defendants that such noncompliance could also subject them to additional sanctions.

"However, we will assume that defendants' failure … was inadvertent, rather than a deliberate disregard of our orders, and we will accept the objection for filing," he said.

The defendants argued that since they submitted a copy of Weilmann's deposition transcript, it could not have intentionally misled the board about what they alleged were "blanks" in her testimony.

Moresi was not persuaded, noting that the defendants did not provide an "actual response as to why (they) misstated the contents of the transcript on numerous occasions, including in court instances in verified pleadings."

The defendants "avoid(ed) addressing the central issue, which is how (they) deliberately misrepresented applicant's actual testimony, an allegation that was the foundation of its argument that it needed to take a subsequent deposition of applicant," Moresi said.

He also pointed out that the defendants claimed they had paid Weilmann's medical bills, but "paradoxically … complain(ed) that (they) ha(ve) no information about applicant's dates of treatment, her medical providers, her medical bills, or other potential insurers or parties" and were "'merely' seeking that information" by deposing her again.

Moresi said the defendants also failed to explain why they did not simply conduct discovery to obtain this information, failed to discuss the statutory prohibition on subsequent depositions, and never addressed the fact that they failed to compel responses from Weilmann within the stipulated period after her deposition.

Moresi concluded that he remained convinced that sanctions against all the defendants was warranted, but since they had responded to the notice, he elected to lower the sanctions.

Moresi, joined by Commissioners Frank Brass and Deidra Lowe, awarded Weilmann her attorney fees of $15,610 and reduced the penalty payable to the state General Fund to $900, from the $2,500 imposed by Judge Glass.

Michael J. Win of Rowen, Gurvey & Win took over the representation of Weilmann after Rowen's death. He said on Friday that the WCAB's decision was consistent with the statutes, which provide that a party generally can only be deposed once.

"You can't expect to have continuing depositions once the record is closed," he said, and "you can't do it just because you want to."

But Win said he felt badly that the sanctions were imposed against Zarutsky. His impression, he said, was that she was only advancing the "hard stance" her clients wanted.

Richard Jacobsmeyer, a founding partner with Zarutsky's firm, said Friday that "we respect the board's decision," although "we don't necessarily agree that this was a case that merited attorney fees and sanctions."

He said that incurring such penalties is "certainly not a pattern or practice" for Zarutsky or the firm, and "we will treat this as instructive in the future."